We will apply Buy-in process for CSDR relevant instruments in line with the CSDR regulation. For non-CSDR relevant instruments, current Eurex Clearing buy in process/schedules will stay in place.
Each CSDR Buy-in follows a previous related CSD penalty report (MT537) with penalty and instrument details, what will be used by Eurex Clearing. Also, WM (WSS) reference data based on ESMA data will be used.
Yes.
Yes, that report stays as it is. Please refer to the Report Reference Manual (RRM) for report details.
Buy-in timeline can be derived from the CSDs CSDR instrument classification that is also part of Eurex Clearings penalty reports.
No, Partial delivery is mandatory with CSDR before Buy-in, Eurex Clearing will send delivery instructions with partial indicator.
Clearing Operations will inform the failing seller on a Buy-in on the day before, a Buy-in notification will be send in the morning of auction day (not before 08:30 following EACH Framework agreement).
No, There is no 1:1 relation of delivering and receiving CM. See EACH Framework section 5.2. The receiving CM will only be informed in case of a cash compensation after failed Buy-in.
No, There is no 1:1 relation of delivering and receiving CM. See EACH Framework section 5.2. The receiving CM will only be informed in case of a cash compensation after failed Buy-in.
No, Eurex Clearing will set instructions at the CSD on hold with Power of Attorney when the Buy-in notification is sent out. The CM has to release the instruction/trade for the (partial) remaining quantity. Please refer to the Eurex Clearing CSDR Release Notes for further details.
Securities CCP will do Buy-in on trade basis as today (Buy-in block used for current CCP on trade basis as today).
With C7 SCS we will put instructions at the CSD on hold with Power of Attorney. EACH agreement (EACH Framework) is that CCPs send Buy-in notification not before 8:30 on day following extension period (=Buy-in auction day). With this notification ends the late settlement possibility. Please refer to the Eurex Clearing CSDR Release Notes for further details.
Only in the case of an illiquid share instrument where a second Buy-in auctions would be executed, the CM can deliver in between those two auctions. The CM has to release the instruction/trade for the (partial) remaining quantity. Please refer to the Eurex Clearing CSDR Release Notes for further details.
Based on agreement with members in SCSC in November 2019:
Only one Buy-in attempt for liquid instruments. Se
cond Buy-in attempt for non-liquid instruments on next BD.
In general, based on the CSDR options, Eurex Clearing will process direct cash compensation after a failed Buy-in (rule above) and will not use the deferral period. Please refer to the Eurex Clearing CSDR Release Notes for forther details.
That is not a task of the participant. Failing instruction will be set on-hold when Buy-in procedure starts. In case of partially succesful Buy-in, Eurex Clearing will cancel the pending instruction and re-instruct the remaining quantity with Power of Attorney (as used for the inital creation of the settlement instruction - but only in case of illiquid shares (otherwise cash compensation follows).
Eurex Clearing will always use the BIA for all Buy-ins. BIA delivery after an auction is 'same day delivery'. As the Buy-in is triggered on the day following the extention period, the settlement of a successful Buy-in auction will always be finished at the beginning of delivery period.
The failing CM can deliver the financial instruments to the CCP up to when the buy in initiation notification is sent out. EACH agreement (EACH Framework) is that CCPs send Buy-in notification not before 8:30 on day following extension period (=Buy-in auction day). With this notification ends the late settlement possibility.
BIA will always deliver to Eurex Clearing account as impacted buyer who initiated the Buy-in auction. Original failed delivery instructions (on-hold) will be cancelled with C7 SCS. Securities CCP will do Buy-in on trade basis as today (Buy-in block used for current CCP on trade basis as today).
Yes, the original instruction to the receiving member is still applicable for the settlement.
Where the price of the financial instruments of the Buy-in is greater than the settlement amount, Eurex Clearing will charge the difference between these two amounts to the failing Clearing Member.
Where the price of the financial instruments of the Buy-in is less than the settlement amount, no price difference payment is made to the failing delivering member as it is ‘deemed paid’ (ongoing discussion with ESMA, Eurex Clearing is awaiting market guidance by ESMA). Please refer to the Eurex Clearing CSDR Release Notes for further details.
Eurex Clearing will bill the costs of Buy-in (e.g. for Buy-in auction) to the failing Clearing Member separately as today.
Yes, the result of Buy-ins triggered by Eurex Clearing will be reported by Eurex Clearing to the CSDs.
Following EACH agreement (5.2.2 Notification procedure), it will be performed as manual process by operations only to the failing CM. CCPs are receiving parties in a Buy-in process for cleared business and will deliver in a second step via original instruction to the receiving member.
No, Following latest ECSDA/SWIFT agreements, ':22F:: STCO/BSSP' (former 'BSSP') to be used for remaining quantity after partial Buy-In.
In case a remaining quantity has to be re-instructed after Buy-in, both legs (receipt and delivery) of the instructions must have the field ':22F::STCO//BPSS' (former 'BSSP') populated, allowing the (I)CSD to
identify the Buy-in case and apply penalties only as of ‘entry date’ in the settlement system instead of ISD (no ‘Late Matching Fail Penalty’ (LMFP) to avoid double penalties).
In case of any questions or your require further information, please contact us at client.services@eurex.com.
